Why Offshoring Should Be Your Last Resort

The sluggish economic recovery and pressure to
increase earnings continues to influence the leadership
of banks and insurance companies to focus on driving
down costs. The temptation, of course, is to offshore
jobs – a strategy which promises a quick fix by reducing
labor costs but one that also has serious ramifications.
Cultural differences, customer complaints, damage
to the local economy, and the complexity of long
distance management are just some of the problems
organizations encounter when offshoring. A plethora
of recent press and research estimates that almost half
of all offshoring projects fail outright or fail to meet
expectations, raising the question of why any company
would even consider offshoring when they have not
yet exhausted their options at home. By introducing
a continuous improvement system, organizations can
still drastically cut costs right here at home without
unnecessarily damaging the local economy, employee
morale and customer loyalty.